21Nightly Business Report
states get from the federal government. ruben ramirez reports from washington. >> reporter: we all know the numbers. failing to reach a deal by january 1 will result in $109 billion in automatic cuts to federal spending. and while that's a big number, what matters most to states and municipalities is the small print, detailing just where those cuts will happen. and standard & poors' gabe pettek says those details could still be months away. >> even if the policymakers in washington, d.c., resolve the immediate issue before january 1 or shortly thereafter, we think there are going to be several details related to the administration of tax policy and the way the federal government spends money that will have an important effect on state budgets. >> reporter: the pew center on the states reports around 18% of federal grants to states would be subject to sequestration's spending cuts. that works out to about $7.5 billion the states could ultimately lose. >> the real worry right now for states is that as many states start there legislative sessions next month is just the uncertainty fro
the economy with a series of fights over taxes, government shut downs and debt limit increases. >> i actually had one hedge fund manager say to me, "oh, they'd never allow to go over the cliff, because they, they being members of congress, would be embarrassed by this. and i don't think wall street understands what it actually takes to embarrass a member of congress on the kinds of issues. >> reporter: if an agreement isn't reached by january 3, the new congress will have to deal with the problem, potentially delaying action even further. darren gersh, "n.b.r.," washington. >> susie: our guest tonight is bullish for 2013. he's wayne kaufman, chief market analyst at john thomas financial. >> so, wayne, give us your bullish case. make the case for us for why you see the dow and the sep up by as much as 12% in 2013. >> well, i do think there's a very good chance that the major index is the s&p and the dow make new all-time highs, sometime in 2013. you have been going over the housing market doing much better but the entire construction industry, the whole building sector is also doing a
governments have debt and there's only one way to pay it back and it's to devalue their own currency. and it's a race to the bottom. >> reporter: there are other factors that could also help support gold prices. central banks worldwide have been boosting their gold holdings to diversify their portfolios, and protect against inflation. this year, central banks bought roughly 500 metric tons of gold, up 8% from last year. in addition, many small investors are buying gold as a safehaven from global instability. >> political certainty is a major driving factor. it is not just here. but, in the western europe, and in the far east. and, in china. >> reporter: strong demand for gold exchange traded funds has also helped support prices. the spider gold trust-- ticker gld-- has $75 billion in assets. and it's is backed by physical gold. it also helps that some hedge funds with bylaws prohibiting them from buying futures, can buy gold e.t.f.'s. >> so there are some people that were restricted before. they're not now, and that's supportive of the gold. >> reporter: a gold rally is not a sure thing.
could be in trouble in india. the indian government looking into whether wal-mart's lobbying activities in the u.s. violated indian laws. shares of wal-mart closed fractionally higher. smith and wesson is buying back an additional $15 million worth of stock, on top of the $20 million repurchase program it recently completed. smith and wesson's shares have fallen nearly 10% since the newtown connecticut shootings. investors bought up gold today, as a safe place to park money while washington lawmakers spar over the fiscal cliff. the precious metal settled $3 hier at $1,663 an ounce. gold prices are on pace for an annual rise of about 6%, the smallest annual gain since 2008. and, supply concerns pushed palladium prices to a nine-month high. investors are worried that tight supplies from the world's top two producers and steady demand from the auto sector could mean higher prices in 2013. it settled at $708 an ounce: over the past year the metal has rising about 7.5%. and finally, for the second day in row the ishares emerging market e.t.f. ended higher. and that's tonight's "ma
trading at 50% of book. the government, awns, sold their position. ben mochet came in from metlife, and he's reall?á changing the culture there. we think there's a great upside to the it. >> susie: royal dutch shell, tell us why you like this. i know it has a big, fat dividend, and you do like dividend stocks. dividend, and you do likdividene to? >> it's a dividend play, and the energy sector did poorly last year. we were wrong on the energy sector because the economy has been limping along. it's the cheapest name in the global energy names and we think the stock really deserves attention going into next year with a big dividend and an $80 target. >> susie: all right, you arey bullish, but i have to ask you what worries you? is there any wild card out there that gives you concern? >> well, i wake up at 4:00 a.m. with a laundry list. we have the-- i wasn't going to say "fiscal cliff" because i have to pate dollar in our jar at the office-- the fiscal cliff issue. mideast, we don't know what's going to happen with the iranian card. north korea feels like they don't have a lot of attentio
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